Uber Technologies, Inc. is facing multiple state-specific lawsuits across the country that claim the ride-hailing company improperly classifies drivers as independent contractors. Plaintiffs in these lawsuits allege that they should be reclassified as Uber employees, a shift that would entitle drivers to benefits such as gas and mileage reimbursement, health insurance, and overtime pay.
One Uber class action lawsuit reached a tentative settlement, but a judge struck it down (see below: “Judge Rejects $100 Million Uber Settlement”).
Driver classification lawsuits are hardly Uber’s only legal problem. In 2015, Uber was hit with 50 U.S. lawsuits—far more than any other so-called “Unicorn” start-up. The lawsuits challenge Uber’s business practices and could change the way it operates moving forward.
Driver Gratuity Settlement
Uber reached a settlement with a group of passengers who claim the ride-hailing service unlawfully took a share of 20% driver gratuities. The settlement, announced July 20, is worth about $344,000. The amount will be divided among nearly 47,000 eligible class members, identified as all individuals who received an email from Uber stating that it would automatically charge a 20% “gratuity” when taxi rides were arranged and paid for through Uber’s service from April 20, 2012 to March 25, 2013.
Named plaintiff Caren Ehret filed suit against Uber in January 2014, saying that she used the Uber app to hire a driver in Chicago and was charged the mandatory 20% tip in addition to the metered fare cost. According to the lawsuit, Ehret was led to believe the entire 20% would go to the driver, when in fact Uber retained part of the tip for itself as revenue. The rides in question were arranged through uberTAXI, an option available for a limited time in Chicago, New York, Washington D.C., San Francisco, and Boston.
Blind Passenger Settlement
A California judge granted preliminary approval in July 2016 to a class action lawsuit brought by three blind plaintiffs who claim they were denied rides from Uber drivers because of their service dogs. The settlement provides $15,000 apiece to the three plaintiffs who filed the lawsuit. Uber also agreed to pay $225,000 over 3 years to the National Federation of the Blind, plus an additional $75,000 if the term agreement is extended a fourth year.
Under the settlement Uber will block drivers from receiving trip requests until they confirm that they’re willing to transport riders with service animals. Drivers who don’t comply with the service animal policy or who refuse to transport riders with service animals will be terminated from the Uber platform.
The judge certified the class and plaintiffs nationwide are now eligible to join. But the lawsuit does not provide for class-wide monetary relief. Instead, the class will not waive their right to pursue damages claims (i.e. an individual lawsuit).
In 2014 the National Federation of the Blind sued Uber on behalf of all blind individuals in California who use a service animal and were denied rides. The lawsuit was a response to allegations that some blind riders were refused service by Uber drivers who did not want guide dogs in their vehicles.
Background Check Lawsuit Settlement
Uber reached a $7.5 million settlement in June 2016 with drivers who alleged that the car service provider terminated them after obtaining their consumer background reports without permission.
California Background Check Settlement
A settlement worth up to $25 million was reached with Los Angeles and San Francisco district attorneys in April 2016 to resolve claims that Uber misled consumers about its driver screening methods. The California civil suit alleged that Uber mischaracterized the safety of its driver safety screening process. Uber did not use fingerprint-based background checks, which according to California is the most comprehensive screening methodology. Uber has called its background checks “industry leading.” The California district attorneys said Uber’s vetting process failed to uncover the criminal records of 25 drivers.
“Safe Rides Fee” Class Action Settlement
Uber agreed in February 2016 to settle two class action lawsuits alleging safety practices misrepresentation for $28.5 million. The lawsuits were brought by customers who said that Uber’s “Safe Rides Fee,” which supports its background check process, was not “industry leading” as Uber claimed because it did not include fingerprinting. (Taxi drivers in California are required to use fingerprint identification when running background checks.)
Uber also agreed to change the name of its “Safe Ride Fee” to “Booking Fee.” Up to 25 million California Uber riders are eligible to join in the settlement.
Judge Rejects $100 Million Uber Settlement
In April 2016, Uber agreed to settle two class actions representing 385,000 drivers in California and Massachusetts. Under settlement terms, eligible drivers would have remained contractors but would have been entitled to a share of the $100 million based on the number of miles they’ve driven. Uber also agreed to partially fund a “Driver’s Association” and to provide more information about why some drivers are deactivated from Uber.
Dozens of drivers who considered the deal unfair filed objections, including the lead plaintiff, driver Doug O’Connor, who fired his attorney and retained new representation.
In a formal objection filed with the court, Mr. O’Connor said that the deal “is not in my interest or in the interest of any Uber driver.”
In August 2016, U.S. District Judge Edward Chen rejected the settlement, saying it was not “fair, adequate, and reasonable” for drivers.
In his rejection of the deal, Judge Chen noted that the amount offered to drivers was just ten percent of what the lawsuit claimed drivers were owed. He also emphasized that Uber would (under the terms of the deal) pay just $1 million in state penalties, which could otherwise total more than $1 billion.
Take Action Against Uber
Anyone with a grievance against Uber–over their employment status, the company’s background check policies, or another issue–is encouraged to contact Morgan & Morgan for a free case review.